Dollar –Kenyan economy seems to be on downward sprawl as its shilling goes on losing value against the world’s dollar.
This is after the United States US Federal Reserve raised its rates by 0.25 percent to hit 4.75 percent even as the Kenyan Central Bank CBK maintained rates at 8.75 percent.
In an in-depth analysis by FXPesa lead analyst Rufas Kamau, while the CBK chose a dovish stance on policy tightening, an aggressive Fed is expected to further stretch the US Dollar-Kenya shilling (USD-KES) exchange rate, which worsened from 123.5 to 124.5 last month in January.
As of now, the shilling is currently trading at sh125 to the dollar; this not being a very good value for the market.
Any strong recovery in the DXY which is the forex benchmark that compares the value of the US dollar to a basket of six foreign currencies could push the dollar-shilling to 130 this month of February.
This is because of the demand for US treasuries which has continued to rise because of higher interest rates.
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